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MESSAGE FROM THE CHAIRMAN

Esteemed Stakeholders,

In 2021, global manufacturing activity maintained its strength and the global services industry embarked upon a rapid recovery phase as vaccination campaigns accelerated. However, uncertainties associated with the economy exacerbated upon emergence and proliferation of new Covid-19 variants in this period. Climate conditions in food exporting countries negatively affected food prices, which soared worldwide with the further addition of higher transportation costs. The International Monetary Fund (IMF) estimated global economic growth for 2021 as 5.9% due to increased volatilities and supply constraints.

The rise in inflation carried on in the last quarter of the year in the US, and the headline inflation ended the year at 7.0%. The US Federal Reserve System (the Fed) deserted its supportive stance and signaled that it might add momentum to rate hikes. The Fed Chairman Powell gave the signal that asset purchase tapering would continue until the end of March and that rate hikes might start from the second quarter. The median forecast of the Fed members indicates at three rate increases during 2022. This projection is in parallel with the market expectations.

The Fed economists forecast 2022 core inflation at 2.7% and real economic growth at 4%.

The European Central Bank (ECB) projected inflation as 3.2% and growth as 4.2% in 2022. Amid a setting that produced the ECB’s highest inflation forecast since 2012, continued quantitative easing by the ECB resulted in weakened Euro. The ECB stated it would keep its benchmark deposit rate unchanged at -0.5% and would continue asset buying until October 2022. The Bank of England (BoE), on the other hand, has been the first to increase the rates to the backdrop of a globally high inflation environment. The BoE is also the first developed country central bank to hike the rates in the aftermath of the pandemic. The interest rate was increased by 15 bps to 0.25%.

Our country was also affected by global food and energy price rises: annual inflation soared to 36.1% in December. The Central Bank of the Republic of Türkiye (CBRT) maintained the policy rate at the order of 19% in July and August, and cut the rates from September on the grounds that the rise in inflation was linked to transitory factors. With a 500-point reduction, benchmark rate was decreased to 14%.

In 2021, our exports and imports grew by 32.8% and 23.6% respectively. Tourism and transportation revenues contributed positively to the current accounts balance in the third quarter of the year. Strong rise in exports coupled with tourism and services revenues pushed the current deficit to the order of USD 15 billion. The manufacturing activity remained strong throughout the year, and improvements were observed in capacity utilization rate and confidence indices. Real economic growth for 2021 is estimated as 11%.

The emergence of new Covid-19 variants exacerbates the concerns and uncertainties associated with the pandemic. In the period ahead, the course of the speed of vaccination and the policies of the central banks of developed countries will be telling on growth.

In this second part of my message, I would like to share my views regarding TEB’s strategic stance and achievements in 2021.

During 2021 that has been the scene to the external developments that we have briefly addressed above, TEB carried on and further developed its activities. In the volatile market conjuncture, our Bank focused on fulfilling its duties and responsibilities completely in keeping with its identity as the solution partner of its clients.

During 2021, TEB carried on and further developed its activities. In the volatile market conjuncture, our Bank focused on fulfilling its duties and responsibilities completely in keeping with its identity as the solution partner of its clients.

Differentiated from the competition with its pioneering moves, innovation and firsts, TEB remains the no. 1 preferred financial services provider of millions of individual and corporate customers and has offered its value proposition to its stakeholders in all areas of the financing array with the products, services and solutions it furnishes.

TEB ended 2021 with total assets worth approximately TL 194 billion and a lending volume of TL 107.8 billion. In the same timeframe, total volume of deposits our customers entrusted to us rose to TL 132 billion. Our Bank continued to contribute to production and employment in 2021. SMEs, start-ups and women entrepreneurs have been our priority target groups. On another front, we stood by our exporter customers that are critical for our country’s economy making use of our global competencies in intermediating international trade.

Digitalization represents another area in which our Bank achieved significant progress. Investing in this area for many years, TEB continually strengthened its distribution channels and diversified its digital banking capabilities in a bid to deliver its products and services to its clients as fast and productively as possible drawing on its innovation power and agile organizational structure. During the pandemic days of 2020 and 2021 that led to radical changes in our usual lifecycle, TEB found the opportunity to test its digital banking capacity and successfully passed this endurance test.

The successful results achieved by our subsidiaries in 2021 have been another source of delight for us. Our subsidiaries captured healthy results in key performance indicators including the number of customers and business volumes in the areas they are engaged in.

In 2022 which is anticipated to be a year of continued volatilities in international and domestic markets, TEB will keep executing its strategy without any compromises.

Before I wrap up my message, I would like to present TEB’s 2021 operational results and financial statements for our esteemed stakeholders’ review.

I would like to thank the TEB management team and all our employees who contributed to our performance in 2021 for their committed and hard work. Also, I would like to express our gratitude on behalf of our Board of Directors and myself to our shareholders for their invaluable and unwavering support.

Yours sincerely,

Yavuz CANEVİ
Chairman of the Board of Directors